Libya has threatened to pull out of talks to compensate families of the victims of a French airliner.

Tripoli said Paris should honour a deal to compensate for Libyan deaths as a result of French involvement in Chad.

France denies any such deal exists and has warned
Tripoli it must compensate for the deaths of 170 people aboard a UTA
airliner bombed in mid-air in 1989.

The French want Libya to pay the same amount of money it is to give relatives of the Lockerbie air bombing victims.

On the basis of commitments given by Libyan negotiators
at earlier talks, France agreed to support the lifting of United
Nations sanctions on Libya - imposed over the Lockerbie case - on 12
September.

However, since the sanctions were lifted, talks on the UTA case have stalled.

Correspondents say France has lost much of its
bargaining power since it agreed, as a veto-wielding member of the UN
Security Council, to the lifting of sanctions.

'Secret agreement'

Seif al-Islam Gaddafi, the son of Libyan leader Muammar
Gaddafi who heads a foundation expected to pay out the compensation,
accused France on Monday of failing to honour a secret agreement on
compensation for the deaths of three Libyan pilots killed when France
intervened in the civil war in Chad in the early 1990s.

"We will not resume negotiations without acceptance of that commitment," he said in an interview with Reuters news agency.

"They should accept the commitment or [there will be] no negotiations any more."

Negotiations over the UTA bombing have been conducted by families' representatives, not French Government officials.

Earlier, Seif Gaddafi said he would not agree to pay
more than $1 million per victim over the UTA case and insisted that six
Libyans convicted by France in absentia for the attack were innocent.

By contrast, families of Lockerbie victims are to be paid an average of $27m each.

A final settlement in the UTA case had been due to be reached by 11 October.